Install RealVNC on the windows machine and read/skim through the Windows VNC Server documentation
. You'll need to "Run the VNC Server" (probably in User-Mode, until you've got what you like) on the windows machine, which will put a RealVNC tray icon down by the clock. If you hover your mouse over this icon, it should tell you the IP address
of the windows machine. You'll have to set the password
if you want one. If so, be sure to choose "VNC Password Authentication".
Before using CamTwist, download a copy of Chicken of the VNC
and make sure you can connect to and view your windows machine with CotVNC. If you're successful with that, you'll have no problem using VNC within CamTwist.
BTW, here's a video of how we use vnc as a PIP for our on-screen graphics